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Formulas for Key Performance Indicators

Key Performance Indicators and formulas

The Key Performance Indicators and their formulas are described in the following table.
 

Key Performance Indicators (KPIs)

Description

Formula

Days Sales Outstanding (DSO)

Measures the average number of days to close invoices weighted by the collected amounts of those invoices.

(Total Receivables * Period Days)/MTD Sales
Where Period Days is the number of days defined for your collections period using the Collection Period feature.

Collection Effectiveness Index (CEI)

CEI focuses on the quality of collections efforts over time by determining the percentage of open receivables an organization is able to recover or resolve within a given time period.

(Opening Total Receivables – Ending Total Receivables + MTD Sales) *100/(Opening Total Receivables – Ending Current Receivables + MTD Sales)

Best DSO

Measures all outstanding receivables in the current bucket

(Current Receivables * Period Days)/MTD Sales.  Where Period Days is the number of days defined for your collections period using the Collection Period feature.

Average Days Delinquent

Measure the difference between the DSO and the best possible DSO

DSO- Best DSO.

Days Beyond Terms

Amount of days beyond terms

MTD Days Late / MTD Payments.

 

Average Days to Pay (ADP)

Measures the average number of days to pay for all invoices

MTD Days Pay / MTD Payments

 

Note:

  • MTD Sales is the sum of Amount Due for the period

  • MTD Days Late is the sum of (Payment Date - Due Date) * Payment Amount

  • MTD Payments is the sum of  payment amounts for the month

  • MTD Days Pay is the sum of (Payment Date - Invoice Date) * Payment Amount

By default, the screen displays the Key Performance Indicators (KPIs) totals for your entire organization. You can view the dashboard KPIs broken down by business unit or region if you are sending this data through the bulk interface with eCredit.

If the KPIs exceed or fall below a maximum or minimum threshold established by your eCredit Business Administrator, an alert appears on the Dashboard.